Naveen calls for mineral royalty change

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Bhubaneswar, June 24: Orissa Chief Minister Naveen Patnaik today demanded necessary changes in the mineral royalty regime without further delay and compensate for the loss of revenue in case of coal.

In a letter to Prime Minister Manmohan Singh, the Chief Minister said he was disheartened to come across report that mineral royalty change has been put on hold by the Union government apprehending negative impact on inflation.

Mr Patnaik said as per the Committee of senior officials the impact of royalty rate revision of major minerals on inflation would be only marginal.

In all fairness, the Union Government, the Chief Minister said, should address the problem of inflation through appropriate monetary and fiscal measures and not by way of depriving the States of legitimate returns on their mineral resources.

It had been a long standing demand of the mineral resources bearing states, including Orissa, to the Union Government to reform the royalty regime of the major minerals so as to let the states get the benefit of a buoyant market of minerals, the Chief Minister said.

Mr Patnaik said of all the major minerals, only coal, chromite and bauxite enjoyed the ad valorem basis of royalty, while all other minerals including iron ore continued to be subject to specific rates of royalty regime. As a result, Orissa, a leading iron ore producer of the country, was losing hundred of crores of mining royalty and on the other hand. It was the mine owners and traders who were garnering all the benefit from these finite resources.

The Chief Minister demanded that the Union Government should effect necessary amendments and bring in ad valorem linked royalty regime in respect of all the other minerals too.

The existing system of compilation and publication of sales price by IBM which forms the basis of calculation of ad valorem leaves much to be desired, he said adding this issue needed to be addressed suitably.

Drawing the attention of the Prime Minister, Mr Patnaik said a delay of more than two years in respect of royalty on coal had deprived the states of substantive sums of legitimate revenues.

It was indeed an irony that instead of revising the royalty, the Union Government had levied an export duty on minerals which accrues to Union Government.


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